Helsinki Exchange: Whose Profit Numbers Are Misleading?
In the world of investing, not all that glitters is gold—and vice versa. Sometimes, strong profit growth hides a one-off transaction, while a sharp decline may be due to a technical comparison base rather than a real deterioration in the business. In this analysis, we look behind the third-quarter results to understand what is really happening with the large-cap companies on the Helsinki Stock Exchange. With new reports arriving in February, now is a critical time to distinguish between sustainable trends and one-off noise.
Sampo reported an impressive 100.5% growth in operating profit in the third quarter, catching the eye of many investors. Net profit more than doubled, creating the impression of explosive growth in the insurance market and pushing the stock price to new highs.
The reality, however, is more mundane: the growth was largely driven by a one-off gain of €355 million from the IPO of NOBA Bank. While Sampo's core business is strong and stable, investors should not expect this growth momentum to continue in the coming quarters—it was an extraordinary event, not the new normal.
Forestry group Stora Enso managed to show a 66.2% growth in operating profit, clearly standing out from the weaker results of competitors like UPM. At first glance, it seems the company has found a magic bullet to restore profitability in a challenging market.
A closer look reveals that the main driver of growth was a one-off gain of €140 million from the sale of forest assets in Sweden. Without this transaction, the picture would have been significantly more modest. For investors, this is a signal that while cost management is improving, the overall state of the wood market remains fragile, and profits are being propped up by asset sales.
Pharmaceutical manufacturer Orion's numbers startled many at first glance: operating profit fell by 40.1% year-on-year. Such a sharp decline could spark fears that the company's product portfolio is losing its competitiveness or that sales have stalled.
However, this is a classic case of the "base effect" trap. The comparison period from the previous year was artificially high due to large one-off payments from partners. In reality, Orion's core business is in good shape, and sales of its cancer drug Nubeqa are growing strongly. Therefore, the headline decline is misleading and does not reflect the company's actual health.
Wärtsilä reported a 19.8% growth in operating profit, which, combined with the stock's recent record high, paints a picture of a strong growth company. Investors have been optimistic in light of the results, pushing the share price ever higher.
This optimism may be premature. The profit growth was driven by a one-off gain of €34 million from the sale of a business unit, while the company's sales revenue actually decreased by 5.0%. This discrepancy between profit and revenue is a warning sign—a cooling core business is being masked by a one-off transaction.
Conclusion
In conclusion, this quarter clearly illustrates why investors should not stop at reading the headlines. For Sampo, Stora Enso, and Wärtsilä, the attractive profit figures were 'bought' with asset sales or one-off transactions, while Orion's alarming decline was merely a statistical anomaly. The upcoming results in February will provide a clearer picture of these companies' true health, free from one-off distortions.
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